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Rob:
Welcome to our podcast, All About the Car brought to you by Schierl Tire and Service. I'm your host, Rob Hoffman, an auto service specialist with over 44 years of industry experience on the ride with me today, our regular guest Brian Call a 40 year veteran of the automotive industry. Hello Brian.
Brian:
Hey Rob. Great to be with you.
Good To have you back. And Bill Schierl a guy that's logged, a lot of miles behind the wheel and always has a lot of great questions. Welcome back, Bill.
Bill:
Hi Rob.
Today we have a special guest on the drive with us. We've got Scott Ferguson of NAPA Auto Parts. Welcome Scott.
Scott:
Welcome. Thank you.
Good to have you along with the ride today. Well, like usual, I got a little curious, so I dug up some history on NAPA Auto Parts and found that NAPA was founded back in 1925. So they've been around a while.
They have Rob, they actually started in Atlanta, Georgia, and a couple of years before that. And then 1925 brought together several distribution centers to form the NAPA name.
Does that stand for something?
It does, National Automotive Parts Association
Now today and some more things that I found out here today, NAPA has more than 6,000 stores and correct me if I'm wrong. Scott, on this in the US, and 5,100 stores in Canada and also affiliated with over 15,000 repair shops under the name NAPA Auto Care. Am I on track here?
You're on track and they've actually expanded beyond that. About 10 years ago, they bought distribution center in Australia and then also in great Britain, which gives us the largest distributor of parts in the world.
Wow.
Wow. That's unbelievable.
Absolutly. And they're also affiliated with repair shops in Latin America and the Caribbean.
They are
Man on that idea. I like that
Yeah, going visiting locations. Right. Very important.
It is. But they also have one in Guam and I'm not sure I'd be so excited to go there.
No, I don't. I don't think so. And also their official spot. NAPA is official sponsors of NASCAR.
Yes. They've been affiliated with NASCAR for as long as I've been in the business, which is getting to be a while since 1987. I've been working with the NAPA system.
You got a car in NHRA also, don't you?
We do Ron Caps and he was the champion last year again. So he been a perennial winner and contender in racing.
Now you've been with NAPA for quite a while. Scott, what's your official title? What's your involvement with the NAPA auto parts?
Well, I worked for the company for 20 years, for Genuine Parts Company. And then I moved back to central Wisconsin as home and in 2013 I bought my first two NAPA stores here in Stevens point and Plover and then have expanded to 11 stores today.
Congratulations.
Yeah. That's awesome.
Thank you.
So then you just said Genuine Parts. Is that different than NAPA?
Yeah, that's a good question Bill, it is. Genuine parts company, again was the founding partner in that. They've grown over the years and NAPA is actually a subsidiary of Genuine Parts Company ,and NAPA's a hundred percent solely owned now by Genuine Parts, but represents roughly 65% of their business. They also have an industrial supply Business Motion Industries and that's the majority of the rest of the business,
Genuine Parts,
Genuine Parts Company.
Got it. Okay.
Yes, sir.
I'm not gonna see Genuine Parts as a brand out if I go shopping for a part,
No, strictly a name and their business is distribution.
I'd like to try to clear up this whole parts thing, just a little bit for our listeners. So obviously when you buy a new car, it's full of parts. There's a lot of parts on that car that are made, I'm assuming by the manufacturer or in affiliation with the aftermarket
Yeah. Coordination with. So that's something that has really changed over the last three decades. There was a time when you would think of Ford and Motorcraft and they were the owners of that and AC Delco and General Motors that's no longer the case. So they work with manufacturers to make their parts OE, but they still label parts as Motorcraft, but they manufacture nothing.
That's interesting. So many of the parts that the NAPA Auto Parts organization supplies to repair shops could be the original parts.
In most cases, they are, we really work hard to differentiate ourselves in the market and what we've come to refer to that is a tier one manufacturer. So they work directly with OE manufacturers, such as General Motors and Ford and Chrysler to supply those parts. And then they also supply us with those parts.
I know that a lot of people probably understand this who are listening to the podcast, but we're talking about OE being original equipment. So...
Yes. Thank you for clarifying that.
Great. What the heck is an OE?
Yeah.
Thanks for reeling that back Bill.
Yeah,
Absolutely. So the aftermarket auto parts business that you're a part of with NAPA pretty darn important. Why, why is it so important to have those parts available,
To provide consistency for the consumer and the repair of their vehicle. When a vehicle is taken into a organizations such as Schierl Tire for repair, they need to be able to obtain those parts quickly competitively and know that they have the quality behind them to meet the needs of the consumer, the person bringing the car in. The OE dealers, while they certainly have things that are available or parts of that are available. There's a couple of challenges. They basically, the amount of stock that they keep on hand is very limited and generally to within vehicles that are five years old or so if you take a look that vehicles on the road today are over 12 years old as the average age of the vehicle, they simply can't stock the needs of the servicing station that the car is at. It also makes it challenging for the servicing station to obtain it because they would have to call multiple locations in order to get the needs for the car versus calling one location, such as NAPA.
So in short, the parts that come on, your new car really don't last forever. And you mentioned that the average age of the car is what'd you say 12, 15 years,
12 years,
12 Years old,
Over 12 years old. Now this year 12 and a half years old is the average age of a vehicle.
And the average miles that people put on their vehicle have really gone up in the, in the last
Significantly
10 years. Absolutely. And back in the day, I remember a hundred thousand miles was really maybe the last birthday a car would've had, but now we're driving 'em up. Oh my gosh. I've had a couple over 300, 4,000 miles. Absolutely.
Several up over a half a million miles, it's crazy how long they last anymore.
Amazing. And the key to that is regular maintenance. You mentioned the wear that goes on in an automobile and they are designed such as brakes. A friction is designed to wear rotors are designed to wear and have to be changed periodically and refreshed to maintain the safety of the automobile
Years grown? Or has it been reduced for how long they I mean, they just are lasting longer. That's why that 12 years, the average age of the vehicle out on the road, that they're just lasting longer and people are getting used vehicles and it just keeps driving.
It is Bill. That's an interesting point. And it's increased significantly. I would say since 2000, or if you go back two decades, it was around seven years was the average age of an automobile. So each year, since then it has climbed and continues to climb.
Also the technology of cars throughout the ages just continually change. So a new model comes out every single year. How does NAPA, or how does the aftermarkets parts business keep up with that? Where a lot of engineering changes, how do you keep current? And when do you need to start supplying a replacement part for a car that let's say a 2022 car, when you gotta start looking at what parts need to be on hand?
That's a bigger and bigger challenge each year, Rob, and it depends on it. When you come into like an oil filter, it has to be the year the car comes out in order to address the needs. When you look at friction, you typically have two years before you need to introduce the coverage in order for that vehicle, the amount of vehicles on the road is a challenge. And what also presents a challenge to the parts suppliers is the amount of limited edition vehicles that continue to come out where they have limited runs. It makes it hard to justify the parts and carrying all the parts needed. So we have key parts and key areas, and sometimes you have no choice, but to go back to the original manufacturer in order to get them.
Right, to your point, it's not uncommon to have a half year car. So a 2016 and a half, they changed the design of the car. Now you got all new parts. So the manufacturer date really plays into that.
That's a good point, Brian, that, and that's another challenge. People think of their vehicle as being a very popular vehicle, which the name plate is, but relative to the constraint of a system that they were using might have only been used for a year or year and a half in the production of say a Chevy Malibu.
So what that makes me think about is if people are investing in a car, no differently that we've talked about, other opportunities to think about in investment is like, how long am I gonna have this? Am I gonna drive this car for 10 to 15 years? And it's an investment and it's a half year that I might be paying more for aftermarket parts because of scarcity. I would assume.
Yeah. If you can even get 'em.
I don't know if that's true or not. Right, can you get them? And it's just like something to consider. And that limited addition of that particular vehicle,
That's a good point Bill also, and I will tell you, there's a lot of resources on the internet consumer report every year does a complete listing of vehicles and reliability and numbers. So, I mean, with a little research, you can pull that down. Another side effect of buying a vehicle is insurance costs and costs of operating. So if you do a little background check before you purchase, you can save a significant amount of money, both in future maintenance and insurance costs, ancillary costs of owning the vehicle.
Yeah we talked in a previous podcast with some insurance agents and you can get some sticker shock. When you buy a particular model. I go back to a car I had back in the eighties, it was a 83 Riviera and it was classified as a sports car. It couldn't get out of its own way, but it had a turbo charger on it. So it's some of the, those features that can drive your insurance costs. So...
Well, geez, Brian, I guess there was a time when you were young then too.
New Speaker:
Cross talk
I was young.
I didn't know you then, but I can see why the insurance would've been so much.
My driving record wasn't okay by then
Took a while to get there though? Well, you know, not only does do car manufacturers come out with a new model each year, new models, but automotive technology is also changing and changing faster than ever. I would've think you would agree Scott when it comes to electric and hybrids and that's gotta affect the NAPA brain a little bit too,
To say that that's a challenge is an understatement. When you look at the new cars again, if you go back just 15 years in time, manufacturers would make a platform and put different bodies on a base platform that made it, I don't wanna say easy, but much more effective. Maybe the word for supplying the needs for that car. Today, they change yearly relative to the demands and expectations of the consumers. And they can rapidly change and add technology that at simply for maybe a bad pun here, but throws a wrench into the works. So the technology it is coming, you know, the electric vehicles when you look, people say, well, what are you going to do? Well, the fact is there's still a lot of components on that vehicle. You still have to have four tires. You have to have brakes all the way around. They talk, well, it's battery operated, but the battery gets hot. So you have to have a cooling system that's in it. So while all of this stuff transitions over to electric power versus needing belts and hoses and so on, it is still present in the vehicle and will require again, regular maintenance in order to maintain it.
And also like just from insurance claims that happen, you start to find out where it seems like that there are a lot more components, all built together. Like, you know, you damage one little side panel and you get into sensors, you get into all the systems that are monitoring the vehicle. It all comes as a unit. Am I just thinking and perceiving that? Or is that a reality in the parts replacement
To clarify just a little bit, Bill put the word expensive reality.
Yeah, that is correct. Yes. 100%
Because when you do damage it, it's expensive. It has to be recalibrated. Like if you, like you said, you hit something at three miles an hour with your bumper superficially. It says not much damage, but it, it will throw out of calibration the sensors that are within that bumper. And then you have to have that recalibrated. So what 10 years ago was a $300 fix, now can be a $3,000 fix in order to bring the car back to standards of safety and appearance.
That would be exactly what we experience.
Are you saying you have experience?
Not personally.
Crosstalk
Corporate damages.
Corporate damages. Yeah.
Yes.
So Brian, you're still driving like you were when you were younger then?
I do not drive like that. I drive like a grandpa according to my family.
Well okay.
We do grow up sooner or later though.
Back on what it's been decades since I've had a ticket.
Well, speaking of driving, just like we do with every all about the car podcast, we always break away for a Wisconsin road trip. And today we are talking about the crystal river canoe trip
On the chain of Lakes.
On chain of lakes in Waupaca area. Where does that river start? Is that start in Iola?
No, the river...
It's in that area.
Bill, I'm not sure of the name of the lake because...
Long Lake
Long Lake.
Right.
So you get at the end of long lake. And I think that's what makes it such a unique event for family and young children. It's just awesome. You take a boat ride across the lake and they pull either the canoes or the inner tubes behind the boat to get you to the head of the river there. And then you don't have a choice. A lot of people think, well, a canoe, you get in a canoe dry, right? Well, no, you have to jump out of the boat, out into the lake to go and get your...
You're committed
Your watercraft. So you're committed to getting soaked before you even get going down the river. But it's just awesome.
So it sounds like you've got some personal experience Scott with the Crystal River.
Oh, it is. It's just when friends come to the area, that's a day trip to do. You can spend as little as probably two to three hours or as much as eight to 10 hours, as long as you want on it. But it's just, and it very enjoyable and beautiful part of the state.
And I can say they also have tubes, which, I mean, you can start there and then there's other tubing trips that you can do half the river or the whole river. And you can just float along
So you can do it by kayak, tubes, canoe. That's what I'm hearing. Anything else? I suppose you could just float around on your own if you wanted to.
Yeah. And you have to be careful with float around because there are rapids on the river. There are some parts that are a little more active and then people get a little excited and then things start to pile up. And, but that's all good and good fun. And sometimes you assist people in falling out of their boats.
Oh, You help them?
That is the old days.
As long as you save the beer cooler. You're okay.
Yeah. The coolers always seem to come through.
Yeah. They stay afloat right?
Yeah. It's quite the whole water system in that area with the Waupaca chain of lakes. And now the crystal river we're learning about, there's just a whole lot you can do in that area of Wisconsin.
Yes. I mean, there's many rentals on the chain of lakes and things like that to rent a float boat for the day. And I think it's just that, you know, like, cuz there's several companies that actually provide access to the crystal river. So I think, you know, if you, somebody want to go and see what's available just Google, crystal river Waupaca Wisconsin or Chain of Lakes and they're going hit all the options.
And when you're done with that, Rob, I think Waupaca also offers just very unique eating opportunities. I mean, if you go right on the chain of lake there's Ding's Dock, I mean, if you go to downtown, Waupaca there's Little Fat Gretchens cafe, which is awesome. If you like sweet things like this guy does
Clearwater Harbor is one of our favorites too, over in the Chain of Lakes.
Oh yeah.
Delicious.
Absolutely. So you could really make a weekend of it if you wanted to. So go from, like you said, two hours to a weekend. Possibly.
Absolutely.
That was a great trip to the crystal river, taking it by canoe tube or kayak. So we're back at it back in business right now. And we're gonna get back into the parts business. And we got Scott right here talking about parts at NAPA auto parts. So let's get into the nitty gritty, the logistics of it all. So I would imagine there's quite a few miles put on a new part before it actually gets put on a car. It probably comes from where and goes to where there's some distribution involved here. Give us a little insight on this Scott.
Yeah. It's really changed. It's kind of interesting. If you go back to the 1980s, over 95% of what NAPA sold was made here in the United States today, it's about 5% and 95% comes from literally everywhere. A lot of people think China, but you look at the great Britain.
Mexico's a big producer.
Mexico's a big, huge producer, south America, Taiwan. Japan is a big supplier of parts.
How are you trying to circumvent the problems with the shipping, with the container ships sitting in long beach Harbor for a month before they even get unloaded? Has that disrupted your business?
Almost beyond belief. NAPA has always prided itself in having parts available and all of our suppliers prior to the pandemic averaged over 95% on time delivery to the NAPA system, we saw that drop to the twenties 20% of what we would order would come in. And actually what NAPA did is chartered their own boat ship to bring over parts exclusively for the NAPA system. So there were still a lot of containers that to your point, Brian, that were in the chain that had the, you know, couldn't get here...
To get here on the land.
But then because it was a continued backlog that was going ongoing, they chartered it their own ship and then filled that ship. And that, that actually got here about four weeks ago. And we're starting to see the impact of that with parts coming in today into our,
Where did that ship land? Did it go to a different port than Los Angeles?
It did not go to Los Angeles. It went to a port north of there and then shipped from there. And part of the challenge, you know, California is an awesome state, but their regulations. There's about 70% of the trucks that are on the road in America cannot go into California because of pollution standards.
And those standards came out back in 2010,
At least yeah. Where...
Sulfur diesel
Diesel an all that. So actually they're working on a shuttle system too, where you've got the dock and then there are trucks that can drive in California that bring it to the border and then other trucks that pick it to take it there. And so there's
Logistical nightmare
Logistical. It is, it's a challenge. It's been a challenge for the railroads too, because it's been a feast famine and it's backlogged their system. So...
So it took 18 months to get to that point, pushing two years, if you start backtracking this, when everything started and got disrupted, I can't imagine trying to buy a steam ship cargo ship to procure it, to move your product. I can understand how come it took that long.
It's a challenge. It really is. And well, I think they put in the news things to make you feel good that they see it unraveling in March or April. And I don't see it unraveling.
You're not feeling it?
We're not feeling it. It's going to go on. At least through this year, I think is before we get regular supply of our goods.
Well, let's follow this particular part right down to the local warehousing. And let's talk a little bit about warehousing and what I mean by that is I think warehousing has changed. At least that's my perception and Scott you'd know a lot better, but there's a lot of automation to the actual workings on the inside of a big parts warehouse. How has that changed over the years?
It just continues to evolve. And I think if you think of Amma, everybody knows Amazon and has seen that on the news where you have automated and robots and pooling. And so on. The automotive industry is moving the same way. We're NAPA is in the process of condensing, the number of distribution centers that they have out and are building for lack of better words, maybe a super DC they've opened one in Nashville, Tennessee it's 350,000 square feet. And it also houses Bill, you had asked the question of Genuine Parts Company and whose houses. So it houses both Motion Industry and NAPA parts, but a considerable amount of automation. The other thing that they're doing, they're making the buildings taller and then the parts go into a huge lack of better word. Again, I think elevator system that rotates their bins and the computer knows what part you need. And it rotates that bin to the robot that takes it off, puts it on an electronic shuttle and away it goes. And it gets delivered to the point where it goes. So they're building these buildings 60, 80 feet tall and then have towers of parts inside them to save room.
So that part is like 80 feet way up there. And it comes down on some type of a automated
Automated system. It, it rotates the tray out, pushes the tray out to the receiving end. And what's interesting is computers don't care where a part is or the size of the part. They just care does it fit in a hole. So humans have to have things in numerical order, right? In order to pull, if you look at the NAPA system, there's over three quarters of a million parts now available in the system. So to stock things the traditional way, if you'll have, it is just not feasible in today's market.
The local warehouse that you get supplied out of is really fascinating watching how the parts get pulled and run down all the different conveyors. And, and that sounds like it's pretty archaic compared to what you're describing now.
Yeah. And that's happened in 20 years, right? So they added on to this distribution center of about 15 years ago and considerable amount of space. They closed DC iandMilwaukee, a distribution center in Milwaukee, Wisconsin, and, and brought it consolidated into Stevens Point. And while they stock parts, they still have to stock them manually versus with machines. So they will scan the part. And then they scanthe shelf that it's going to. So the system always knows where it is. Numeric order is not necessary at the distribution center. However, we still have to stock that way at the store level.
Yeah. You talked about 300,000 square foot, but you're going 60 to 80 feet up in the air. So in essence, you got one half a million cubic feet of storage or eight to 10 warehouses if it's laid out flat.
Correct.
Wow. That just gotta be a site to see
It's amazing. And our manufacturers, our suppliers are having to do the same thing.
Well, let's take this part to that next step. So now this part needs to get to where Scott? It's gotta get to your retail store.
It does. So we, the NAPA system has nightly deliveries. So if there's a special need, the distribution center will pull that during the day. And at six o'clock the next morning when we're in the store and checking things in that part is there. So on the special order on stock for my store, it comes from both the distribution center or we order directly from the factory relative to the needs.
You're kind of spoiled though, aren't you? You got this big fancy warehouse right in your back door and can get parts within 45 minutes to an hour.
Yeah. Let me change that word, Brian. I'm really spoiled, But so is Schierl Tire.
I mean, because it's a unique opportunity for you folks too, to, to really take care of your guests and get them turned around by having that part right in town here.
And speaking of our guests, we've gotta get that part now to one of Schierl Tire and Service shop.
So we can fix Mrs. Johnson's Buick.
Now, how does that happen?
That's getting more and more electronic. You look up the part in your operation on a computer and you say, that's what I need. And it comes over onto our system electronically. And then it goes into our computer. We invoice it out. And when we do that, we move it to a dispatch center and then we track our delivery vehicles and the time that it, it takes to get to your operation. So it gets queued up on this delivery screen. And then we have a person that pulls the part and then dispatches our driver to get it to you on a prompt basis.
You've got vehicles running all over throughout the day. I can't imagine trying to keep track all of them.
So how do you do that? I mean, you've gotta main these vehicles as well. You've gotta practice what you preach here because those cars can't stop.
They don't stop.
I see 'em everywhere.
So sometimes they stop me, but not... They roll. And to your point, I mentioned it earlier on oil changes. Really. I don't recommend going beyond 5,000 miles. That's where I'll kind of go against what the original manufacturer will say. They'll put a light in there and it quote, unquotes monitors, the oil life for you. And to me, they press the limits of what the oil is capable of doing or what the fluid is capable of doing to protect your vehicle properly.
I agree with you 100% on that, the demands that the oils are put under with variable valve timing and now the lubrication they have to do, it's just too demanding on it,
Especially in our neck of the woods, in the upper Midwest here, where we've got temperatures ranging from a hundred degrees in the summer down to below zero. I mean, we have such a range it's considered to be pretty tough, a severe service. Absolutely.
And as we've talked, you know, like people are getting in their vehicle at negative 15 and just starting and going. And that engine hasn't like really had the full chance to lubricate and get the fluid moving.
That's a good point, Bill. And the opposite is kind of just as bad as with the electronic starting and everything. Now people will start their vehicle up to 20 minutes before which isn't necessarily
It's sure nice to get into though.
Now, Brian, I can't argue that. I mean, when Rob, you were talking about technology, heated steering wheels and heated seats, and
Not everybody has heated seats, by the way.
You just put that on the order list. When you get the vehicle,
Wait, 12 years, it's just a mere 12 years and every car out there is gonna have it.
My butt will freeze for 12 years. Yeah, absolutely.
Well that's an interesting point wait a mere 12 years, because if you think back a little bit, most cars had crank down windows on them.
Today Honda does not build a car with a crank window.
They're gone.
My daughter's car is a Ford Focus and it's got power windows in the front and crank windows in the back.
Interesting.
I've never seen that
It was built for salesmen. So it's typically one person driving Ford made a run like that.
Well, that's funny.
Talk about the limited edition runs, made for a very specific market. And now you have to find that crank handle when somebody, you know, like breaks it off.
Now I'm gonna bring up a sore subject, Scott, but NAPA's not the only game in town. There's a lot of different parts, suppliers and systems out there. So it's pretty competitive.
Rob. That's the only point I'd ever argue with ya on. We are the only game in town
But
It is, I will tell you that it's really boiled down to just a handful of players though. You basically have O' Riley's auto parts Advanced and AutoZone, and then you have NAPA. And I think what's really unique about the NAPA system is we're the only system that really supports the independant ownership, all the other stores that are in town are corporately owned stores. And obviously when you buy from there, you're supporting local payroll, but those dollars leave the community.
That's a very good point. And most people don't realize that that's one of the reasons that we partner up with you and we're helping our neighbors.
Yeah, absolutely. I think it makes a difference.
We talk about auto parts and that's what we're talking about today, but you not only supply auto parts, but you're also involved in well, body repair supplies, accessories, farm, and Marine and tools. I mean, you really kind of go the full gamut here, heavy duty parts
A to Z, which is both a blessing and a challenge. And again, with the span of parts that's available. One of the unique things that we have in every one of our stores are people that can speak to the needs of the person coming in. And sometimes we ask for patience when a farmer comes in and a bearing goes out in the field, they'll deposit pieces on your counter and you have to kind of put together the puzzle. So it's very challenging. And there's unlike an automobile where we can take a license plate number or a VIN number to identify what that vehicle is and what the needs of the vehicle are. When you get into those secondary type offerings, it, it can be more difficult.
So you've gotta be a detective as well. You've gotta have a store full of detectives.
That is a good way to put it right.
There is nothing better than a good parts guy to be able to figure out, like you're saying, Bearings is a prime example.
You into it weekly where you gotta figure out what it is.
Yeah. In theory, it sounds good. It comes with a number on that bearing from the factory, but after it's overheated, it disintegrates that number no longer exists,
We never run into that.
Never run into that.
So you... Are you saying like farm equipment and things do not have the same type of structure of parts tracking for that manufactured year, or are you just saying that the parts oftentimes wear out and melt and are just under different circumstances when they brought it?
That's an awesome point. And quite frankly, both when you get into class eight, the semis or tractors, farmers, people, they order what they like, what they want. And it isn't necessarily standard from one tractor to another central Wisconsin makes it even more unique with the Plainfield area because of the amount of potatoes that are grown there. And the specialty equipment that's been developed specifically for that crop. Cranberries is another awesome example.
They build everything. There's nothing stock with those guys.
So you'll have a 15 year span on a piece of equipment that they've put together to meet the needs of the special application that they're using it for.
Didn't realize that, okay,
Well, Scott, at Schierl Tire and Service, I know I can speak for all of us. We really appreciate your partnership, but we both do important work. We keep the wheels and vehicles running and you help us to do just that. So we appreciate what you're doing for us.
Well, we learned a lot today about car parts. We thank Scott from NAPA auto parts for joining us in this special episode of all about the car. We hope to have you ride along next time on all about the car to listen to previous episodes, find additional resources or to simply send us a message head to all about the car podcast dor com. We'll see you next time.
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